iPhones, Foxconn and Obama’s Empty China Rant

 

While President Obama took aim at China during his state of the union address this week, Apple was on its way in after-hours trading to becoming the most valuable company in the world– adding over $20 billion to their total stock market value. This rise was driven by another amazing quarter of  iPhone and iPad sales.

Apple is considered an “American company,”  but the score on Tuesday evening was China 1, Obama 0. Apple, like many consumer electronics firms, has outsourced most of their manufacturing work to China.

The President stated, “I will not stand by when our competitors don’t play by the rules…. Tonight, I’m announcing the creation of a Trade Enforcement Unit that will be charged with investigating unfair trading practices in countries like China.” He also asserted that “Our workers are the most productive on Earth, and if the playing field is level, I promise you -– America will always win.”

But when it comes to jobs, the playing field is far from level, and most of what’s unleveling it has little to do with what the President considers unfair trade practices.

An article this week in the New York Times and a recent “This American Life” radio piece both provide details about life at one of Apple’s primary manufacturing partners – Foxconn.  By American work standards, the conditions are awful. The Times reports routine 12 hour day 6 day weeks with few breaks, and wages of  less than $2 per hour. The worker safety rules, protection of worker’s basic rights, and  input into conditions that we typically take for granted seem to be an after thought.

In the This American Life  Piece, Mike Daisy claims to have seen workers as young as 12 at the gates of the Shenzen facility, and interviewed several workers fired after crippling repetitive motion related injuries made them unable to work. Environmental regulations are considered to be equally lax.

As was quoted in the Times piece,  a former apple executive admitted that ”most people would still be really disturbed if they saw where their iPhone comes from.”

Many respected economists, including Paul Krugman, assert that these jobs still represent a significant improvement in prospects and a path out of poverty for those lucky enough to land them.  Others point out that workers in the US would probably not want them – especially given the working conditions and pay.

So the central question is really whether we are willing to accept lower standards for products produced outside of our country than those produced at home?

Isn’t this an unfair trading practice?  What exactly does an even playing field really mean?

In response to the criticism of the conditions under which Apple products are made, Apple is vowing to add transparency and more carefully audit the conditions of their sub-contractors to meet their code of conduct.  But given the type of work done in China,  and the radical wage difference, don’t expect these jobs to come back to the US anytime soon….unless consumers are willing  to give up buying iPhones and iPads as a way of voting with their pocket book.

That doesn’t seem likely.

Photo: Official White House Photo by Pete Souza

92 comments

William C
William C26 days ago

Thanks for the information.

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W. C
W. C27 days ago

Thank you for the article.

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Glenn M.
Glenn Meyer5 years ago

Mike C.,

The bills you indicate are all corporate ascendancy legislation. They do not create jobs merely because they create profits for the corporation. The bottom line is that the incentive is NOT to create jobs unless there is no other way. The money to be saved by sacrificing our clean air and clean water will end up in bank accounts in foreign countries. Just like Mitt Romney's tax return shows.

Mitt Romney is running on his experience of job creation. Explain to me how jobs are being created with his 15% taxed billions in bank accounts in foreign countries, never mind his company busting experiences at BANE.

The debates between him and Obama will be a blood bath. Even Gingrich started to cut his throat on his job killing experience.

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Steve A.
Steve A5 years ago

Outsourcing jobs to China and India has reduced the costs incurred by many western companies.

I find it interesting that these companies outsource IT, and production because workers in China and India will work for quarter of the pay their western workers do, yet none of these companies have suggested outsourcing management.

I'm sure that the average Chinese/Indian would fight to do their high paid jobs for $80,000 a year.

That could save companies a couple of million for every outsourced executive.

Makes the thirty bucks an hour outsource savings for 10 people look pathetic.

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Steve A.
Steve A5 years ago

Outsourcing jobs to China and India has reduced the costs incurred by many western companies.

I find it interesting that these companies outsource IT, and production because workers in China and India will work for quarter of the pay their western workers do, yet none of these companies have suggested outsourcing management.

I'm sure that the average Chinese/Indian would fight to do their high paid jobs for $80,000 a year.

That could save companies a couple of million for every outsourced executive.

Makes the thirty bucks an hour outsource savings for 10 people look pathetic.

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Steve A.
Steve A5 years ago

A bill that cuts the profits of US companies?

I was going to say good luck getting that through. But the bill will get through.

It will allow US companies to stop foreign companies who use the same tactics they do but who still manage to sell their product cheaper.

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David Osborne
David Osborne5 years ago

MIKE: GOOD ON YOU!! Is that Wyoming property Ocean Front?

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Mike Barnes
Michael Barnes5 years ago

If the iPhone were made in the US it would cost about $38 more. The supposed productivity at Foxconn shakes out like this, 8,000 employees? were roused from bed, given a biscuit and tea, and proceeded to make 10,000 iPhones in a 12 hour shift. Actually, they changed the screen glass. That works out to 1.25 per employee. If an American had production numbers like that he or she would be on the street.
Economics 101 teaches us that demand creates jobs. Americans are lazy, self-centered shoppers. There are products made here. Jeans, underwear, twine, fasteners, tools, appliances; the list is long. I buy these things. Many other products that are no longer made here I will purchased used, from the time when they were. I have a stove that was built in 1955. With minimal care and cleaning it will last far beyond 2055.
Two things need to happen. Tariffs need to be reinstated, which rewards companies that produce here, and people need to learn how to shop. It's not a sport or a hobby, btw. Joining the race to the bottom by buying junk and lowering wages, reduces demand, which lowers corporate profit. More demand is created by paying living wages. Unions have always known this. Henry Ford knew it. Pay people enough so that they can afford what they make and demand increases.
On another note, related to a post here - I actually do have some land in Wyoming that I'll part with for about $150 per acre :-)

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David Osborne
David Osborne5 years ago

James, Quote "For any Chinese who might be able to read this, it the story is true that workers housed in dorms who work 72 hours a week were routed out of bed to rush iPads into production, why do you call yourselves socialists? Go read Ludek Pachman's Checkmate in Prague. Chinese revolution 1911-2011, ha ha! Dialectical materialism with an unquestioned reverence for technology has displaced social conscience"

James, what you do not know about Chinese people is tremendous. Not just you , but America and I would guess most of the world. Chinese do not even know what Socialism or Communism Means, not alone what Dialectical Materialism means. Have no idea at all what democracy is.

The only thing that really matters to the Chinese People is their immediate family back to the Grandparents. Nothing else matters.....No family member left behind!!

You must consider this country is about 15 or more centuries of Monarchies, Then Later 40 years of Mao's Communism. The last 20 years Communism that has embraced Capitalism but not democracy.

Probably the only Government in the World afraid of Twitter or Face Book and You Tube....Their interference in Chinese daily life is Minimal. No Cops trying to arrest you for speeding. No cops hanging out at bars to arrest you for Drunk driving. People do not get all fidgety when the Police are behind them, Hardly even notice.

The only thing Chinese are angry about is their lack of access to World information. In t

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James M.
James M5 years ago

For any Chinese who might be able to read this, it the story is true that workers housed in dorms who work 72 hours a week were routed out of bed to rush iPads into production, why do you call yourselves socialists? Go read Ludek Pachman's Checkmate in Prague. Chinese revolution 1911-2011, ha ha! Dialectical materialism with an unquestioned reverence for technology has displaced social conscience.

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